Landbank approves P1.1B in loans to support local onion industry

State-run lender Land Bank of the Philippines said Friday it has approved over a billion pesos worth of loans to support the growth of the local onion industry.

In a statement, Landbank said that, as of September 30, it has approved P1.1 billion in loans to support the production and trading of onions and acquisition of cold storage equipment.

The lender said additional loans worth P102.9 million are in the pipeline.

The bank said onion is a high-value crop that can be financed under the Landbank Sulong Saka Program, designed to provide credit assistance to various qualified stakeholders for agribusiness projects that support high-value crops production, processing, and marketing.

Under the program, small farmers may borrow up to 90% of the total project cost for a production loan, while a maximum of 80% may be borrowed by small and medium enterprises (SMEs), cooperatives, farmers’ associations and organizations, large agribusiness enterprises and corporations, non-government organizations (NGOs), and countryside financial institutions (CFIs).

Eligible borrowers may also avail of up to 80% of the project cost for the acquisition of fixed assets, and up to 85% of the market price of the commodity for commodity loans.

Local government units (LGUs) may likewise avail of financial support under the Sulong Saka Program, provided that the loan amount will not exceed their net borrowing capacity, as certified by the Bureau of Local Government Finance (BLGF), Landbank said.

Loans for working capital and permanent working capital are payable up to one year and three years, respectively, while loans for fixed assets and construction of facilities are payable based on project cash flow but not more than its economic useful life, according to the bank.

The interest is based on market rate, while loans for smallholder farmers shall bear a concessional fixed rate of 5% per annum, it said.—AOL, GMA Integrated News